Q. With reference to government receipts, consider the following statements:
1. Revenue receipts include incomes like taxes, non-tax revenues, and foreign grants that do not create future financial liabilities.
2. Non-revenue receipts include borrowings which are not considered income but increase the government’s financial liabilities.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation:
- Revenue receipts refer to the government’s earnings that do not create any liability or reduce assets, such as tax income, non-tax income, and foreign grants.
- Non-revenue receipts include borrowings (both domestic and external) which are not income and increase the government’s financial liabilities, hence classified separately.
Source- TMH Indian Economy by Ramesh Singh
